Reviews. Commentaries. Opinions.


Global Capital Markets

2023 Half Year Review

We are pleased to present strong results for the first half of 2023. The pain of 2022 is still with us, and we have not forgotten. Last year was remarkable as both equities and bonds experienced significant declines in tandem due to the impact of inflation and steep increases in interest rates.

Normally stocks and bonds have an inverse relationship, and as such; when one goes up, the other goes down, providing support to a portfolio. In 2022 we had meaningful losses in the markets for both these core asset classes in what is widely regarded as a "once in a century event." In 2023 we see that stock markets have made a significant recovery, but bonds still have a way to go before they make up for last year's losses. In the meantime, bond investors are being compensated with far higher yields than we have seen since before the 2008 financial crisis.

In our opinion, it's still too early to declare that the inflation crisis of 2022 is over. Inflation is coming down meaningfully, but due to a highly robust US labor market, it will take a few more quarters to see the newer trends taking shape. Despite inflation coming down, we do not expect interest rates to start being reduced before mid-2024.

The following table summarizes the market index returns for 2023 to June, the last 36 months (which takes us from the Covid rebound of 2020), and also shows what happened in 2022 for the same 6month period as 2023 to show us as a reminder of how bad 2022 was.

index returns for 2023

For further discussion, please try the following links for our quarterly webinars in English and Hebrew.


The key takeaway messages discussed in these webinars can be summarized as follows:

  • A major part of Equity market returns comes from relatively few very large companies, which supports our approach of investing in markets rather than picking individual global shares.
  • The US economy is showing much more resilience than expected back in January.
  • A banking crisis did not follow the collapse of Credit Suisse, Republic Bank, and Silicon Valley Bank in March – this should be a source of comfort and shows how much stronger the banking system is compared to 2008.
  • The probability of a mild recession or growth slowdown is still meaningfully high.
  • The probability of severe recession is low.
  • Markets appear to be anticipating a "soft landing" or mild recession.
  • Quality Fixed Income in both shekels and USD are offering good value.
  • Inflation is coming down, but it still will take some time.
  • Don’t expect interest rates to come down quickly.

From a portfolio positioning point of view, we are maintaining our overweight to USA equities and underweight other equities. On the bond side, we are overweight investment-grade bonds and underweight higher-risk bonds compared to our Strategic Asset allocation. We like index-linked structured notes in global portfolios and inflation-linked bonds for Shekel portfolios.

The aforementioned information is not a substitute for personal Investment marketing, which takes into account the particular circumstances and special needs of each person. The views expressed in this Review should be considered as market comment for the short-term for information purposes only. As such the views herein may be subject to frequent change, are indicative only and no reliance should be placed thereon. This Review does not constitute legal, tax or accounting advice, or any investment recommendation, or any offer to buy or sell financial instruments of any kind, and does not take into account the investment objectives or needs of specific investors. Although this Review has been produced with all reasonable care, based on sources believed to be reliable, reflecting opinions at the time of its writing and subject to change at any time without prior notice, neither Pioneer Wealth Management nor any other entity or segment within the Pioneer International Group makes any representations or warranties as to the accuracy or completeness hereof and accepts no liability for any loss or damage which may arise from its use. The writer and the company are unaware of any conflict of interest at the time of publishing the above commentary.

About the Author

Mike Ellis

Mike Ellis

Director and Chief Investment Officer

Mike Ellis, originally from South Africa, joined Pioneer in March 2000 after working in the Private Banking & Trust industry in the UK. At Pioneer he was the group CFO for the better part of the last decade. Today Mike serves as a director and is the CIO.

Mike is a Chartered Accountant, a CFA charter holder and received his MBA from Tel Aviv University & Kellogg Business School. Mike is also an Oxford University Alumni having participated in the Said Business School's Global Investment Risk Management Program. In addition, Mike is a licensed Portfolio manager by the Israel Securities Authority.

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